Nearly a quarter of homebuyers regret their choice of lender

by Ryan Smith10 Nov 2016
Nearly a quarter of customers who’ve purchased a home this year regret their choice of lender, according to a new study.

According to J.D. Power’s 2016 Primary Mortgage Origination Satisfaction Study, released today, 21% of customers purchasing a home express regret over their choice of lender. Among first-time home buyers, that number jumps to 27%.

The study found “two distinct situations” among customers who regretted their choice of lenders.

In the first situation, customers reported having a poor experience overall – an above-average incidence of problems, lack of communication and unfulfilled promises. “While this group’s responses aren’t unexpected, they are often vocal about their displeasure making an average of 9.0 negative comments, compared with the study average of 0.7,” according to a J.D. Power news release.

The second situation is a bit more unexpected, because customers in this situation rated their overall satisfaction as high. These customers said they were pressured to choose a particular mortgage product. And this is a big group; among customers who said they regretted their choice of lender, 72% reported being steered toward one particular product.

“This ‘happy buyer’s remorse’ is in part due to customers feeling that circumstances out of their control drove them to a particular choice and that options weren’t totally clear,” said Craig Martin, director of J.D. Power’s mortgage practice. “Like a lot of consumers, they are happy with a good deal, but they can feel that they have to jump through hoops to get the deal. In the end, they may not fully understand what they got, and the longer-term risk for lenders is that customers’ perceptions of the deal may change in the future.”

This year’s study isn’t all bad news, though. A higher percentage of customers in 2016 said their loan representative always called back when promised (85%, up from 81% last year) and that their loan closed on the desired date (81% vs. 79% in 2015).

Overall satisfaction was significantly higher among those buying a home than those refinancing, according to the study. That’s a change from the previous two years, when satisfaction among the two groups was virtually identical.

Quicken Loans held the highest customer satisfaction rating for the seventh year running. Also rating high in customer satisfaction were CitiMortgage, Ditech Financial and Guaranteed Rate.

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